Indian BPO market forecast to cross $14 billion

“Though the Indian BPO business is growing, we have to overcome hurdles to create a right talent pool and infrastructure. Earlier, BPOs were concentrated in Tier I cities, however now they have realiseed the potential available in domestic market and are at aiming smaller cities,” he added.

Further, he said, as Indian industry is witnessing huge demand from overseas clients, BPO has now transformed from just a support business to a value enhanced end-to-end solution.

Nasscom Chairman Harsh Manglik said “Earlier, companies were looking at India as a cost effective destination with a huge English speaking population, now that is changing.” According to Nasscom, BPO business accounts for 25 per cent of country’s IT exports, has presence in 50 cities in the country and provides employment for 4.5 million people.

India’s BPO spend accounted for 34 per cent of global spend in 2009. The Nasscom data said growth of small and medium enterprises will act as an agent for the predicted growth of the segment. The segment will see mix of integrated pure play and captive organisations focusing on niche geographical areas, service lines and verticals. The long term potential for the BPO industry is immense- the addressable market for BPO services is expected to expand four fold to $895-980 billion, representing an opportunity which is 50 per cent bigger than the overall IT opportunity.

On European crisis, Mittal said, export-driven sector has not seen any adverse impact from the debt crisis. On the proposed bill to tax outbound calls by the US senate, Manglik  said “We don’t see an impact of a proposed bill to tax outbound BPO calls from US going offshore, as outbound calls contribute to only about 2 to 3 per cent of the business from the US.” Earlier, US Senator Charles Schumer had proposed to introduce a bill that will levy tax of 25 cents on each outbound call originating from the US.